A delay of up to two years in the Kudu power plant project is predicted after the South African utility Eskom pulled out of the scheme, Dow Jones reports. The withdrawal of the utility may also affect the size of the development.
Eskom decided to withdraw after a feasibility study gave the company cause for concern about its projected expense. Other investors in Kudu are Shell (22.5 per cent), National Power (19 per cent) and the Namibian utility Nampower (45 per cent.)
The $3 billion project involves construction of a gas-fired power plant in Namibia and the export of gas to South Africa. Namibia has experienced a growth in power demand of between 6 per cent and 11 per cent over the last few years. To meet this growing need, it has relied on imports from South Africa.
The Kudu project is now likely to be built in two stages. The gas-fired power station was originally to have been of 750 MWe capacity. This may now be reduced unless export markets for some of the power, possibly to South Africa, can be secured.
A draft white paper on energy policy in South Africa has suggested that IPPs should be permitted to enter the market.
